Allowing small businesses to defer VAT bills for six months

David Cameron has called on the Government to allow small and medium-sized businesses to defer their VAT bills for up to six months.

He described small and medium-sized businesses, which employ over 13 million people and turn over £1,440bn a year, as the "lifeblood" of our economy.

And, writing in The Observer, he outlined three areas in which small businesses must be helped:

• Councils must speed up the time it takes to process payments to small businesses who provide them with goods and services
• Banks have got to behave responsibly and "stop the march to mass insolvencies"
• The Government must do everything they can to help small businesses, including scrapping the propose 2p rise in corporation tax

David explained that our plan to allow small and medium-sized enterprises to defer their VAT bills for up to six months would mean a typical business with 50 employees, revenues of £5m and an annual net VAT bill of £350,000 wouldn't have to pay £90,000 to the taxman when the bank has just taken away its overdraft.

And he stressed, "Britain's small businesses need our help. We intervened to prevent the beating heart of our economy - the financial system - from collapsing. We've got to do the same for its lifeblood."